Business Economists See Brighter Outlook for Job Growth

Business economists’ outlook for near-term hiring strengthened this spring to the highest mark in nearly three years, a new survey found.

The poll by the National Association for Business Economics said 43% of corporate economists expect hiring within their firm or industry to increase during the next six months. That was the most optimistic forecast since July 2011. The latest poll found that only 8% of economists expect businesses to cut payrolls over the next two quarters.

A projected increase in hiring raises the prospect that the unemployment rate could inch down toward its historical average later this year. The unemployment rate — 6.7% in March — has fallen more than a percentage point since the start of last year, but remains elevated compared to the average monthly reading of 5.8% since 1948.

Two-thirds of economists in the “goods-producing” segment, which includes manufacturers, said hiring will increase. But only 30% of service-sector firms expect employment gains to ramp up. Manufacturing jobs tend to pay higher wages than those in service sector. As a result, increased manufacturing hiring could support growth in incomes and consumer spending.

Still, the latest projections come with a familiar warning label: Past predictions of an around-the-corner economic breakout have largely failed to materialize since the recovery began nearly five years ago.

During the six months following the previous peak in hiring optimism in July 2011, the pace of payroll gains slowed slightly compared with the first half of that year.

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